The Federal Government of Nigeria and the Central Bank of Nigeria (CBN) have entered into a new Memorandum of Understanding (MoU) aimed at improving coordination between fiscal and monetary policies and strengthening the country’s overall economic management.
The agreement was signed in Abuja on Friday by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, and the CBN Governor, Olayemi Cardoso.
The MoU establishes a formal framework for regular consultations, information exchange and joint assessments of economic developments and policy measures by the Federal Ministry of Finance and the apex bank.
Under the new arrangement, both institutions will deepen collaboration in critical areas such as government cash management, debt issuance planning, liquidity forecasting, macroeconomic analysis and the exchange of relevant economic data.
The framework is also expected to help minimise policy inconsistencies that could arise when fiscal and monetary decisions are made without adequate coordination. By improving communication between the two institutions, the government hopes to create greater consistency in the implementation of economic policies.
Speaking on the agreement, Oyedele explained that the framework would make institutional cooperation more sustainable and less dependent on the personalities occupying key government positions at any given time.
He, however, emphasised that the operational independence of the Central Bank would remain protected under the arrangement.
According to the minister, tackling Nigeria’s inflation challenge requires coordinated fiscal and monetary responses, particularly because price pressures are also influenced by structural factors such as food production and distribution costs, energy prices and logistics challenges.
Cardoso described the MoU as a formalisation of the longstanding relationship between the CBN and the Ministry of Finance. He said it would provide a more predictable and structured mechanism for engagement between both institutions.
The CBN governor also highlighted the importance of the framework as the apex bank progresses towards an inflation-targeting regime. He noted that the effectiveness of monetary policy would be enhanced by a fiscal environment that supports price stability.
Oyedele said the wider objective of the collaboration is to achieve sustainable price stability and ultimately bring Nigeria’s inflation rate into single digits.
He stressed that achieving this goal would require both institutions to coordinate their respective actions while continuing to operate within their clearly defined mandates and maintaining the independence of the CBN.
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The latest agreement therefore represents an effort to strengthen institutional coordination in Nigeria’s economic policymaking, with particular emphasis on inflation management, liquidity, public finance and macroeconomic stability.
